ELGIEQUIP - Investment Analysis: Buy Signal or Bull Trap?
Last Updated Time : 20 Dec 25, 07:05 am
Back to Investment ListInvestment Rating: 4.1
| Stock Code | ELGIEQUIP | Market Cap | 14,942 Cr. | Current Price | 472 ₹ | High / Low | 614 ₹ |
| Stock P/E | 42.5 | Book Value | 57.9 ₹ | Dividend Yield | 0.47 % | ROCE | 28.4 % |
| ROE | 21.9 % | Face Value | 1.00 ₹ | DMA 50 | 491 ₹ | DMA 200 | 510 ₹ |
| Chg in FII Hold | -1.50 % | Chg in DII Hold | 1.01 % | PAT Qtr | 90.8 Cr. | PAT Prev Qtr | 81.5 Cr. |
| RSI | 38.5 | MACD | -5.06 | Volume | 2,17,353 | Avg Vol 1Wk | 3,57,074 |
| Low price | 390 ₹ | High price | 614 ₹ | PEG Ratio | 1.82 | Debt to equity | 0.01 |
| 52w Index | 36.4 % | Qtr Profit Var | -7.24 % | EPS | 11.1 ₹ | Industry PE | 39.1 |
📊 Analysis: ELGIEQUIP demonstrates strong fundamentals with ROE at 21.9% and ROCE at 28.4%, both supportive of long-term compounding. Debt-to-equity at 0.01 reflects a nearly debt-free balance sheet. EPS at 11.1 ₹ is modest but consistent, and PEG ratio at 1.82 suggests fair growth-adjusted valuation. Valuation is slightly stretched with P/E at 42.5 compared to industry average of 39.1, but still within reasonable range. Dividend yield at 0.47% provides modest shareholder returns. Technicals show RSI at 38.5 (oversold), MACD negative (-5.06), and price below both 50 DMA (491 ₹) and 200 DMA (510 ₹), indicating bearish sentiment and potential correction. Quarterly PAT dipped slightly (-7.24%), but overall profitability remains strong.
💡 Entry Zone: Ideal entry would be in the 430–460 ₹ range, closer to valuation comfort and support levels. Current price (472 ₹) is slightly above fair entry zone, making patience advisable for better risk-reward.
📈 Exit Strategy: If already holding, maintain positions for long-term (3–5 years) given strong ROE/ROCE and debt-free status. Consider partial profit booking near 580–600 ₹ resistance if valuations stretch further. Long-term holding is favorable due to consistent profitability, strong fundamentals, and sector resilience.
Positive
- 📌 Strong ROE (21.9%) and ROCE (28.4%) support compounding potential
- 📌 Debt-to-equity at 0.01 indicates robust balance sheet
- 📌 PEG ratio at 1.82 highlights fair growth-adjusted valuation
- 📌 EPS at 11.1 ₹ reflects consistent profitability
Limitation
- ⚠️ Valuation premium: P/E 42.5 vs industry 39.1
- ⚠️ Quarterly PAT decline (-7.24%) raises sustainability concerns
- ⚠️ RSI at 38.5 indicates oversold momentum but bearish trend persists
- ⚠️ Dividend yield at 0.47% is modest
Company Negative News
- ❌ FII holding decreased (-1.50%)
- ❌ Price trading below DMA levels signals weak sentiment
Company Positive News
- ✅ DII holding increased (+1.01%)
- ✅ PAT improved sequentially from 81.5 Cr. to 90.8 Cr.
Industry
- 🏦 Industry PE at 39.1, sector moderately valued
- 🏦 Capital goods sector benefiting from infrastructure and industrial growth
Conclusion
🔎 ELGIEQUIP is a strong candidate for long-term investment with excellent ROE/ROCE, debt-free balance sheet, and fair PEG valuation. Entry near 430–460 ₹ offers margin of safety. Existing holders should maintain positions for 3–5 years, targeting exits near 580–600 ₹ if valuations stretch further. Long-term compounding potential remains favorable given sector growth and company fundamentals.
Would you like me to extend this into a peer benchmarking overlay comparing ELGIEQUIP against capital goods peers like Thermax, Triveni Turbine, and Kirloskar Pneumatic to highlight relative valuation comfort zones?
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